by Naver, the South Korean search giant, announced today that it plans to acquire pre-owned clothing marketplace Poshmark for $1.2 billion in cash. The deal values Poshmark’s publicly traded shares at $17.90 — a 15% premium to today’s closing price — and the companies expect it to close by Q1 2023, subject to approval by its shareholders Poshmark and “the satisfaction of certain other customary closing conditions.”
If the transaction is completed, Poshmark will become a standalone subsidiary of Naver led by CEO Manish Chandra and Poshmark’s current management team. It will also continue to operate under its existing brand and maintain its staff, user base and headquarters in Redwood City, California.
In a press release, Naver and Poshmark lay out several arguments for why the deal makes sense for both parties. By acquiring Poshmark, Naver hopes to capitalize on the service’s growing social shopping platform, where users buy and sell clothes online, with its “technological prowess.” As for Poshmark, it is supposed to benefit from Naver’s image recognition and smart lens search technologies, which Naver says will enable the shopping platform to offer new search, recommendation and shopping experiences that allow users to find clothes by searching for colors, designs and materials and identifying where to find products by scanning clothes using the camera on their phones.
Naver also touts its robust ad serving and payment infrastructure, arguing that Poshmark will be able to leverage it to better analyze sales statistics and serve international customers. The long-term plan is — with Naver’s support — to grow Poshmark’s business in additional developed markets in Asia and elsewhere where Naver has significant business holdings, in part by integrating some of Naver’s live shopping services with Poshmark’s platform. At the same time, Poshmark will build on Naver’s US footprint, which includes digital comics portal Webtoon Entertainment and online story platform Wattpad.
Naver optimistically predicts that the acquisition could increase Poshmark’s annual revenue “beyond” 20% and save the company $30 million in annual operating interest within two years.
Poshmark CEO Manish Chandra said in a press release:
The opportunity to join forces with Naver — one of the world’s leading and most innovative and successful Internet companies — is a testament to the strength of our brand, operating model and what we’ve built over the last decade with our talented team and the amazing community. Our industry continues to evolve at a rapid pace, and we’re excited to continue leading the future of shopping by providing our community with an unparalleled experience that’s simple, social, fun, and sustainable. This is an extremely exciting opportunity for our employees, who will benefit from being part of a larger, global organization with shared values and complementary strengths. This transaction also provides significant and immediate value to our shareholders. In the long term, as part of Naver, we will leverage their financial resources, significant technological capabilities and leadership across Asia to expand our platform, upgrade our product and user experiences, and enter new and large markets. I look forward to working with Naver as we lead our company into its next phase of growth.
Naver CEO Choi Soo-Yeon said:
The combination will create the strongest platform to strengthen communities and renew commerce. Poshmark is the definitive fashion brand in the United States that provides a social network for buying and selling clothing. Naver’s leading technology in search, AI recommendations and e-commerce tools will help power the next phase of Poshmark’s global growth. Poshmark is a natural fit for our business — our two companies share a common set of values and vision around content, community and empowerment. The merger of Naver and Poshmark will immediately put us at the forefront of creating a new, socially responsible and sustainable shopping experience designed around sellers of all sizes and interests — from individual sellers and influencers to professional sellers, brands and specialty boutiques — and loyal and highly engaged social community. We are excited to work closely with Manish and his talented team to create lasting value for all our stakeholders.
Poshmark’s departure comes more than a decade after it was founded in 2011. Chandra — along with Tracy Sun, Gautam Golwala and Chetan Pungaliya — started the company in Chandra’s garage, funding it in part with proceeds from its sales of Chandra’s previous company, social shopping startup Kaboodle. to Hearst. Prior to its Nasdaq listing at a valuation of more than $3 billion, Poshmark raised more than $160 million in venture capital from VC firms including Temasek, Menlo Ventures, GGV Capital and Mayfield.
Poshmark claims to have over 80 million registered users.
